Over at TechCrunch guest blogger Adam Penenberg as put part of his new book Viral Loops up. It is the story of how Tim Draper got the viral loop into Hotmail. Given that investors love to see viral marketing theses days it is nice to see that one of the earlier loops was brought about by VC.
At the next meeting at DFJ Tim Draper once again pushed the two young entrepreneurs to insert a tagline into each message. Bhatia and Smith were adamant about not adulterating email. It just wasn’t done. They would feel like they were polluting emails with advertising, and what about privacy issues? If someone is adding a tagline what else were they doing? A user would wonder what else they had access to and they were also fairly certain it was unethical. But Draper wouldn’t let it go. The benefits, he contended, far outweighed the risks. If they were predicating their entire business on the size of their user base, they should be doing everything in their power to increase it as fast as possible. “P.S. I love you. Get your free email at HoTMaiL.” The more he said it, the more he liked it. (via TechCrunch)
Apparently this story was under contention for a while until the authors of Founders at Work dug up some corroborating evidence. So here is at least one case where the VC really did contribute more than just capital.